Dubai’s Non-Oil Private Sector Slows Down in October: PMI
TEHRAN (Tasnim) – Activity in Dubai’s non-oil private sector eased in October, a survey showed on Monday, as the Middle East tourism hub struggles to bounce back from the coronavirus crisis.
The seasonally adjusted IHS Markit Dubai Purchasing Managers’ Index (PMI) declined to 49.9 in October from 51.5 in September, edging below the 50 mark that separates growth from contraction, Reuters reported.
The reading signaled an end to the growth trend seen in the third quarter this year, with the non-oil private sector registering the slowest output growth in five months.
“Output levels declined in the construction and travel and tourism sectors, mostly due to a lack of new building projects and weak tourist numbers,” said David Owen, economist at IHS Markit.
“Growth in the wholesale and retail sector was the softest in five months, signaling a broad-based slowdown across some of Dubai’s key sectors.”
With a diversified economy reliant on sectors such as tourism, transportation, real estate, trade, and financial services, Dubai has been badly hit by the pandemic this year.
The International Monetary Fund has estimated the emirate’s economy could shrink by 9.8 percent this year, and S&P Global Ratings has predicted an 11 percent contraction.
To cut costs, firms continued to cut jobs across the private sector economy in October, the IHS survey showed, with the rate of contraction gaining pace compared with September, although below levels seen in the previous six months.
“Businesses also showed weaker optimism towards the economic recovery from COVID-19, amid reports of weak demand and uncertainty about the future impact of the pandemic on activity and jobs,” said Owen.
“In fact, the overall level of confidence was the weakest in the series’ eight-year history.”
